Self-made cash payment vouchers disallowance additions made for truck hire charges doubting genuineness of expenditure without making any enquiry was deleted by ITAT Kolkata.
Case Law Details:
I.T.A. No. 1182 /KOL/ 2013 Assessment Year: 2008-2009
Assistant Commissioner of Income Tax vs. Shyam Sundar Agarwal
Date of Judgment/Order: 27/05/2016
Important Judgments Cited:
M/s. Ashoka Transports [ITA No. 1265/KOL/2009]
Ranjit Singh Prem Singh Ahuja –vs.- DCIT (ITA No. 961/PN/2014)
Brief Facts of the Case:
The assessee was engaged in the business of transportation and handling work under his two proprietary concerns M/s. Sree Durga Roadways’ and M/s. Shree Balaji Roadways’. For the relevant year, hw had claimed expenditure on account of Truck hire charges. During the asessment proceedings u/s 143(3), the AO observed that only self-made debit vouchers for payments made in cash were produced in support of the charges which were not amenable to any verification. Accordingly he disallowed Rs.30,00,000/- out of the total expenditure on account of non-verifiable element.
On appeal, CIT(Appeals) noted that the Forms 15-I & 15-J submitted by the assessee contained the addresses of the truck owners to whome the payments were made and those forms were not doubted by the AO. He also observed that there was no reason preventing AO from making enquiries based on the material on record to verify the genuineness of the expenses. Therefore CIT(A) deleted the disallowance made.
Important Excerpts from ITAT Judgment:
……… No enquiry whatsoever was made by the Assessing Officer with the concerned truck owners to find out the genuineness of the hire charges claimed to be paid by the assessee. Even no specific or material defects were pointed out by the Assessing Officer in the vouchers maintained by the assessee in support of his claim for truck hire charges except that the said vouchers were self-made vouchers and the truck hire charges were paid by the assessee in cash. Keeping in view the nature of the business of the assessee, there was nothing unusual in making the payment of truck hire charges in cash through self-made vouchers so as to doubt the genuineness of the expenditure incurred by the assessee on truck hire charges. Moreover, as rightly held by the ld. CIT(Appeals), the ad hoc disallowance of Rs.30,00,000/- made by the Assessing Officer was without any basis. In the case of Ranjit Singh Prem Singh Ahuja –vs.- DCIT (ITA No. 961/PN/2014 dated 24.06.2015), a similar issue had come up for consideration before the Pune Bench of this Tribunal and the disallowance of 2% of transport expenses made by the Assessing Officer by raising trivial objection was held to be not sustainable by the Tribunal on the ground that no material discrepancy whatsoever had been pointed out by the Assessing Officer in the books of account and other record maintained by the assessee in support of its claim for transport expenses. Keeping in view the decision of the Coordinate Bench of this Tribunal in the case of Ranjit Singh Prem Singh Ahuja (supra) and having regard to all the facts of the case, we are of the view that the ad hoc disallowance of Rs.30,00,000/- made by the Assessing Officer out of truck hire charges was not sustainable….
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